Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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In a nutshell...

  • The more significant the variation between auto insurance premiums within the group, the more abstract an average becomes
  • Many car insurance websites exist where you can get personalized car insurance quotes and compare multiple providers
  • If you are paying significantly more for your car insurance, it might be a useful flag to look at the cost of your coverage

The cost of auto insurance can vary depending on many different variables.

When drivers use the term “average car insurance rates” they refer to the average cost of car insurance premiums for a particular group of people or area of the country.

It is useful to know the average cost of car insurance you still need to remember what this number indicates to avoid being misled by the “average” figure.

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What is an average car insurance premium?

An average is a mathematical computation in which all the numbers identified as meeting specific criteria are added together and divided by the total number of terms.

For example, if you wanted to figure the average car insurance rates for young male drivers in New York, you would compute the total of all car insurance premiums paid for a year by young male drivers in New York.

Taking this number, you would then divide by the total number of drivers. The number obtained would be the average for that group, and would reflect the “center point” of auto insurance rates for that group.

The more significant the variation between auto insurance premiums within the group, the more abstract an average becomes. Averages can also be skewed by a high number of unusually high or unusually low figures.

It is important to remember that averages, or means, are not the same as medians, which are the real “center point” for any group of numbers.

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How can average auto insurance rates help when shopping for car insurance?

Average car insurance rates are useful in making comparisons. For example, one source states that the average car insurance rates paid by drivers in Michigan are $2,541.

If you are paying significantly more than this amount for your car insurance, it might be a useful flag to look at the cost of your coverage and compare current market rates.

It is often better to seek an average which is more group-specific when making comparisons, as the variation between driver groups can be thousands of dollars per year.

For example, if you are an older driver with a good driving record, a homeowner’s policy with your company, and an excellent credit rating, you should expect to pay less than the average for your state.

To make a more informed decision, it might be helpful to look at average car insurance rates for people who are more like you and are grouped by car insurance companies into a shared “pool” of drivers.

Many car insurance websites exist where you can get personalized car insurance quotes and compare multiple providers. Some even offer side-by-side comparisons of auto insurance rates specified by groups and individual states.

Enter your zip code below to get FREE car insurance quotes today!